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3.2. Placing reliance on a decision of the Authority for Clarification and Advance Ruling dated 02.9.2014 in ACAAR No.122/2013-14 (Acts Cell - II 6691/2014), the learned counsel for the assessee pleaded that Image Runner is an office machine connected to a computer and it acts on combination of one or more functions and they are predominantly usable when connected to computers to perform the tasks for the performance of which the machines are so designed and programmed.

3.3. The learned counsel appearing for the assessee submitted that Entry 68 (22)(a) of Part B of Schedule I to TNVAT Act, 2006 is akin to Entry 18(i) of Part B of Schedule I of the Tamil General Sales Tax Act and therefore, the image runner, which partakes the character of "peripheral" to the computer and the multi-function device should be correctly classified.

8.1. Likewise, it is also useful to refer the factual backdrop and the decision of the Authority for Clarification and Advance Ruling dated 02.9.2014 in ACAAR No.122/2013-14 (Acts Cell - II 6691/2014). In that case, the assessee sought clarification on the rate of tax on digital multi-function devices. The factual backdrop and the plea of the assessee in that case are as under:

"4.1. The applicant-firm has stated that they are importing Digital Multi Function Devices of several brands, viz., Cannon, Sharp, and Konica Minolta, which are connectible to the computers to print, scan and copy, facsimile and fax the documents. These Digital Multi Function Devices are commonly referred to be the computer Peripherals, basically designed to connect with the computers so as to perform the functions like printing, scanning, copying the documents and besides faxing the documents. The applicant-firm has furnished the brochures of the Multifunction Devices; it deals with, revealing technical specifications and also literature relating to its functional applications. The applicant-firm has also furnished along with the application the Bills of Entry for home consumption, revealing its Customs Tariff Classification under the code 8443.3100. Besides, the Partner representing the applicant-firm has placed reliance on the decisions rendered by the Hon'ble High Court of Madras in the case of Canon India Limited and Others vs. State of Tamil Nadu and Others reported in 2013-VIL-53-MAD and Hon'ble Supreme Court in the case of XEROX India Limited vs. Commisioner of Customs, Mumbai reported in 2010(260) E.L.T. 161 (S.C.), wherein it has been adjudged that the Multifunction Devices are peripherals to the computer system. The Partner of the applicant-firm has finally pleaded that the structural and functional features of the digital Multifunction Devices may be considered as that the Computer peripheral, classifiable as an Information Technology Product liable to VAT at the rate of 5% under Entry 68 of Part-B of the First Schedule to the Act."

8.2. The Authority for Clarification and Advance Ruling placing reliance on the notification issued by the Government of India, Information Technology Department in G.O.No.3, CT & R (B1) Department, dated 1st January, 2007, interpreted Entry 68 Part B item No.22 and came to hold that multi-function device is an office machine connected to a computer and it acts as a combination of one or more devices, namely, fax, photocopier (xerox), printer and scanner. In paragraph 6.3, the Authority for Clarification and Advance Ruling discussed about the details of the multi-function machine, which read as follows:

"6.3 A MFP (Multi Function Product/Printer/Peripehral), multifunctional, all-in-one (AIO), or Multifunction Device (MFD), is also an office machine connected to a computer which incorporates the functionality of multiple devices in one, so as to have a smaller footprint in a small business or office setting or to provide centralized document management/ distribution/ production in a large-office setting. A typical MFP may act as a combination of some or all of the following devices, viz., E-mail, Fax, Photocopier (Xerox), Printer & Scanner. The products, viz., Digital Multi Function Devices of several brands such as Canon, Sharp, and Konica Minolta, imported and marketed by are connectible to the computers to print, scan and copy, facsimile and fax the documents. As per the details available in the brochure furnished along with the application by the applicant-firm of the imported multifunction devices, it is found that they are predominantly usable, stands connected to the computers to perform the tasks for the performance of which the machines are so designed and programmed."